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I would retire tomorrow, but the way our system works my retirement income will nearly double if I work for another four years. The state removes the “age penalty” at age 62. We get 2% per year, so 30 years gets 60% of the average three highest consecutive years in income. If you have 30 years in by age 55 you also escape the penalty.
For me it’s about the energy required to do good work during the day, and then go home and sustain that energy. I seem to be ebbing a bit and am acutely aware of it. I’m hoping retirement can be invigorating!
Curious - how can the pension pay more than working? I will have a pension, but no matter how long I worked, it would never be more than my work pay.
In my case, I had my own business. As a business owner, the business can contribute 25% of my salary to my retirement account and write that off as a business expense. Meanwhile, I personally can contribute (and max out I might add) to a 401K. Maxing out both amounts, amounts to way more $ than a regular person can contribute each year. It’s not fair on some level. Anyway, when you repeat all of this over 23 years, add my wife’s employee contributions, stock purchases at a discount and other savings vehicles, things pile up. Next you need conservative investment objectives managed by a fiduciary advisory firm. That has resulted in rather consistent return for us.
We did not gamble, we did not make a fortune on any one stock, there were no home runs hit. All we did was consistently maxed out the contributions and never wavered thru the ups and downs of the market. I am convinced that consistency is one thing that made the difference for us. Aligning with an advisor that is a fiduciary was 2nd. Asset allocation that makes sense and spreads the risk was 3rd. The way to build wealth has more to do with minimizing the downs rather than maximizing the ups.
We lost lots of time and i am quite sure lots of money dealing with a traditional broker. We bought into “he knows what’s gonna happen”, that ain’t true.
Same here. My goal is to duplicate my job's net pay (at least), with my pension plus SS. I have an investment portfolio, but don't figure that into the equation. That will be a nest egg that I would use for emergencies or big, unexpected expenses, or a splurge here and there, or to pay for whatever will pop up near the end (as something surely will). I don't want to count on investment income for my living expenses. So if I can hang in there with the job for two more years when I hit 65, I will exceed my net pay a bit. But more importantly, Medicare will start at 65. Insurance is the BIG fly in the ointment for me. Otherwise, I would probably work only one more year. Not sure what to do with my home's equity at some point. But good to know it's there if I need it too. At least that's as far as I've gotten with "The Plan". So much to think about.
I am glad I am not the only Pre Retiree lurking around on CD
At 65 I could afford to not work.
Medical was covered.
So I retired.
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Originally Posted by MI-Roger
Burn-out, or rather the fear I would burn-out soon. Finances were adequate, no future promotional opportunities at work, a list of things I would like to accomplish outside of work, being the oldest in the Dept with no others close in age, no work projects on the horizon which lit my fires, etc
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Originally Posted by MichiganGreg
Wanted to get back into music full time, and retired when I had the funds to pursue this dream.
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Originally Posted by leeba
The short answer is "freedom." Freedom to do what I like each day. Loved my career for >30 years but I was ready for a change.
All of this.
Also, in one of my last projects, I had built up a support team to such critical importance to the company, that when the project ended, they retained the team...and rather than promote me, they named an executive to run it.
Certainly made me realize I was being underpaid.
Also, I had a couple of medical scares and decided I didn't want Death to find me in my cubical.
Now, two years into retirement, I'm healthier than I was two years before I retired.
So many sad stories here. Mine isn’t even remotely sad, I’m glad to say. Rewarding career both mentally and financially that far exceeded what I ever expected, when in college & getting in to it, and compared to many, I guess maybe I didn’t set my sights high enough, but luckily I don’t suffer that “need to overachieve”. Top 10% has always been good enough.
We never lived that frugal, just not wasteful. We should have traveled on more vacations, in hindsight, but there were more than many have had to nice places in and out of the US. I never maxed out anything but IRAs and maybe the 401k a few years, but honestly the majority of the financial success all occurred (and continues) basically from 2001. Yes, there was considerable planning and some volatile investing, lots of sweat equity in home buys & sells, so nothing fell in my lap, no big inheritance or lottery wins, but no bad luck either. Well, two divorces, the second of which started me net negative in 1995, certainly a lifetime low, but I was only 37 at the time, plenty of time to start over. I retired in 2019, at 61, with a healthy pension, about a third of my gross pay, but I actually have more net income in retirement than I ever had while working, since I never used my raises essentially for anything except paying off debt first, then investing and saving for retirement. We live better now than we ever did. Besides a mortgage, we have been debt free since 2007. Buying as much house as I could afford via a mortgage, and seeing considerable appreciation on each, means mortgages made me a lot. Our current mortgage at 2.65% is net positive every year.
Technically, since I haven’t filed for SS yet at age 64, and don’t plan to for 4 more years when it will be between $46 & $48k, I am pulling what I want from my portfolio, so not really income, but since the portfolio has grown over $200k more despite me pulling from it, I’ll call it a win. I also have a hobby I love that pays me net positive.
The utter idea of being bored in retirement seems a bizarre concept to me. There will never be enough time in a lifetime to do everything that I want to do. And with money pretty much never being a concern, that whole side of my brain that was always concerned with providing for the future is now available for pleasurable endeavors.
I retired because there is way more to life than working, no matter how much I was getting paid or fun I was having, by far, & it was time to, and I wanted to, start the next phase, however long that might be. DW & I made the observation that she is now older than my chain smoking mother was when she passed away. The older you get, the faster time screams by. My none too healthy father passed away at 81. But his parents, who led simpler (not particularly healthy) lifestyles made it to their mid 90s of natural causes. I can look back and see how they all lived at my current age and am encouraged.
I think my husband's federal pension (under the pre 1983, think it was) retirement system, pays around the same amount as his salary from the federal government did. It comes out that much as he doesn't have all the deductions taken out of his pension that he did out of his salary when he was working. He still does get a hefty portion deducted for our secondary health insurance, though.
I have a state pension ( not one of the blue states, so it's not a princely sum). Between that and the social security I get, it comes out to about as much as I made with that employer when I was working.
the max is 80% but you have to put in a lot of damn years to get that.
I started teaching History in the early 1980s in a nice middle-class neighborhood. Over the next decade, integration brought us 13 buses daily from the worst part of town. Gradually, the good families all moved away (white flight) and were replaced by poor immigrants from Latin America, and savages from the ghetto.
Since there were 14 separate school districts in my city, I couldn't move to a better school without taking a large pay cut. Instead, I hung in there and did my best to educate kids who were mostly uninterested. Over the years, I counted 35 current or former students murdered, and even more who were imprisoned. Finally, I quit counting.
Many times, after a bad day, I wanted to quit, but the lure of an eventual pension made me stay. At age 60 after 32 years, I retired, sold my house, kissed my girlfriend goodbye, and moved to Maui.
Best decision I've ever made! I began substitute teaching and found the job that I had always dreamed of. Kids here are awesome!
This is my 40th year in the classroom and I've made many new friends in the local community.
I'm not sure of the time frame that the OP is referring to, when asking why did you retire, in other words, did he/she mean, "Did you retire within the last 24 months because of covid concerns", or did you simply retire because of.......
I retired close to 14 years ago, after 37 years on the job. Why I retired was a multi-faceted decision, but the primary reason was because a poorly explained, and somewhat sketchy policy, was being instituted by the government, which would have negatively impacted my pension payout. This program went by a very innocent sounding policy called the "Pension Protection Act".
Apparently, from the little bit that I was able to find, employers and employees pay into some sort of government held "slush fund" that will cover a portion of your pension, should your employer go "belly up", and can no longer pay your pension benefits......I think. And there might even be a provision that covers lump-sum payouts, if your employer offers them. Again, I tried doing some research on this, and mostly found the usual, government-speak, word salad.
In more personal terms, in 2008, I was considering retiring. My goal was to be out at 55, but the job I had finally worked my way into, wasn't too bad a deal, so 55 came and went, but as 56 appeared on the horizon, and some changes were possible for my job, I began to think about pulling the plug. Then I heard about this "pension protection act", again, looked into it, and indeed, bailed out.
From the little that I was able to unearth, the PPA would allow my employer to reduce the amount that my lump-sum payout would be, by $7000, right off the top. This was if I worked beyond May of '08. Stay working into '09, and that amount would increase to $13,000. The explanation was unclear, but as the old saying goes, "Money talks".
However, I've been involved in other discussions, on this site, regarding work, and I don't want to be repetitive, so in brief, for most of the 37 years that I worked for that corporation, I worked some sort of OT, whether it be 6 days a week, 10-14 hour shifts, or a combination of both, during my career. I was simply burned out.
the max is 80% but you have to put in a lot of damn years to get that.
I think my husband's guv'mint employment would qualify as a " lotta damn years" for sure. He worked for the VA for 36 years, and paid in somehow ( i never knew the details or how that worked, you probably do) to get his 10 years of military service prior to his VA employment, counted towards the FRS.
He also had about 17 years in the SS system ( worked as a contractor on the side- unrelated to his VA job, then 7 years for a private employer after his VA retirement), so he also gets some SS. Though the amount he gets for that is significantly reduced by the federal Windfall Provisions Act.
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